Weakening Demand Is Ill-Timed, But Rents Continue To Rise

The five-year boom in office absorption is losing steam, and the slowing comes as the
first in a wave of new Class A buildings recently landed on the market. Meanwhile,
countywide lease rates continued their steady rise in the first quarter and are on track
next year to equal the rent levels of the bubble-infused peak in 2007.

Continued weakness in net absorption has resulted in only 137,000 sq. ft. coming off
the market in the last two quarters. That is down from the quarterly average of 432,025
sq. ft. in net absorption since 2011 and off of the 560,490-sq.-ft.-average in quarterly
absorption since Q2 2014. The latest three-month period’s performance was hobbled by
161,715 sq. ft. of negative absorption in Class A space.

Full Report Available 1Q2016_Office_Market_Report (OC)